Prupim, the real estate fund management arm of M&G Investments, has acquired New Carnegie Court, a block of student accommodation at University of Aberdeen, from the UK listed developer and manager of student accommodation Unite. The transaction amounts to £33 mln (EUR 41 mln).
Prupim, the real estate fund management arm of M&G Investments, has acquired New Carnegie Court, a block of student accommodation at University of Aberdeen, from the UK listed developer and manager of student accommodation Unite. The transaction amounts to £33 mln (EUR 41 mln).
New Carnegie Court is a purpose-built student accommodation scheme which is located on the university's Hillhead Campus. The property comprises seven blocks arranged around a central courtyard and provides 520 beds arranged in cluster flats. The property is let to the University of Aberdeen on a 25 year full repairing and insuring lease at a rent of £1,914,160 per annum.
This type of transaction is known as an ‘income strip’ because the freehold is retained by the university. At the end of the 25 year lease the leasehold rights will revert to the university for a nominal fee.
Kris McPhail, investment management director at Prupim, said the transaction reflected investors' strong demand for 'bond'-like investments that provide long-term income.
Richard Simpson, managing director of Property at Unite, added that 'the transaction is testament to the growing appeal of the student accommodation sector to a range of UK and international institutional investors, who are attracted by the annuity-type income stream'. 'The deal was ‘win, win, win’ for all parties providing the university with a means of expanding and enhancing their estate without spending their own capital.'
